A new administration has taken over, but, the issues that have plagued Black Diamond during the past few months are far from over.

Leonard Smith, the former city administrator who was terminated Dec. 8, has filed a claim against the city seeking severance pay. Because the 62-year-old Smith was fired for cause, he was not given severance compensation.

According to city officials, the insurance company retained by the city is handling the case.

Smith was hired as city administrator Oct. 1 following the termination without cause of

Gwendolyn Voelpel. She was paid $87,015.83 in severance compensation and Smith’s contract called for a similar payment, if he was terminated without cause.

Smith was fired by former Mayor Howard Botts following a background check conducted by Keith Barnes for the city.

According to a Dec. 14 letter from the interim City Attorney Yvonne Ward, “The background check raised red flags. Specifically, news articles reported that when Mr. Smith was City Manager for Tumwater (from 1984-1993), the police investigated him on the allegation that he was a Peeping Tom, including an alleged incident involving the wife of a City of Tumwater employee. News articles indicated that Mr. Smith was associated with a prior Peeping Tom complaint as well.”

Ward’s letter stated Smith was terminated for cause Dec. 8 because he breached his employment contract by failing to cooperate with the background check. The letter added that Smith was guilty of “...misrepresentation; insubordination; deceit regarding moral character; deceit regarding his prior employment; failure to perform his duties; and abandonment of his position.”

Calls to Smith for comment regarding the story have not been returned.

Turmoil

Additional pieces of puzzle leading to Smith’s termination have fallen into place through documents provided to the The Reporter following a public records request.

During the week of Nov. 21 a series of events and issues apparently reached a breaking point. Smith was initially terminated by Botts, but was placed on administrative leave Nov. 20 and given another opportunity to respond to issues concerning the background check and insubordination.

At the same time Smith was placed on leave,

Loren Combs, who had been city attorney for 15 years, either resigned or was fired. According to the city he resigned, but Combs insisted during a Dec. 15 phone interview he had been fired.

Ward was then hired as the interim city attorney.

A memorandum from Ward – received through a public records requests – describing a Nov. 22 executive session sheds some light on the issue.

According to the memorandum, Combs had called Brenda Martinez, the city clerk and acting city administrator at the time, and tendered his resignation. According to the memorandum there was a witness to the resignation call.

Combs showed up at the executive session to make his case and was asked by the to leave.

Ward’s memorandum stated, “Upon hearing about a witness (to the resignation call), Mr. Combs then stated he said ‘he was going to resign’ but had not done so yet. The Mayor asked Mr. Combs to depart so the Council could commence executive session. He refused.”

According to the memorandum, Botts determined, “...any attempt by Mr. Combs to ‘undo’ his resignation would be rejected and he would still have to leave the executive session.”

Ward’s memorandum noted Combs “defied the Mayor’s direction to leave the executive session.” At that point Police Chief Jamey Kiblinger “hand delivered a notice of immediate termination to Mr. Combs.”

The document goes on to state Combs was again asked to leave and refused. Kiblinger left the meeting and returned with two police officers. The chief asked Botts if he wanted Combs to leave and the mayor said, “I would like Mr. Combs to leave.”

Again Combs refused to leave and the memorandum stated, “The Chief turned to the two police officers, who took an ‘attentive stand.’ The Chief again told Mr. Combs he had to leave. Mr. Combs looked at the two police officers, said ‘I am leaving,’ and left the room. The officers departed thereafter.”

Questions raised

The issues surrounding Combs, which led to the executive session scene, surfaced in May 2009 when the Seattle law firm Byrnes & Keller, hired by Kirkland-based developer YarrowBay, sent a letter to the city concerning Combs’ billing practices.

YarrowBay is in the process of building two large developments in Black Diamond area, The Villages and Lawson Hills.

The city and YarrowBay signed a funding agreement in June 2007 stating the developer would pay for core city staff, city code consultants, related support facilities, equipment expenses and legal costs.

A series of letters from May to September and e-mails outline a dispute between the city and the developer. YarrowBay stated Combs’ legal firm, VSI, had billed for legal work outside the agreement and double billed for other services.

YarrowBay requested mediation to settle the issue and maintained that Combs should not represent the city.

In an Aug. 14 letter from the city, signed by Botts, it was stated, “I will be continuing to call upon the expertise of Loren Combs to resolve this issue and any others related to the funding agreement.”

As the dispute with the developer continued to simmer, a July 8 e-mail from Rebecca Olness, who was on the City Council at the time, but was elected as mayor in November, shows some frustration over the information being provided to the council.

Olness wrote in the e-mail that she was “concerned that, to my knowledge, we have not made an effort to resolve it. I have looked at some of the billings and can see some misinterpretations on both parts, but I feel that we need to address this immediately....

“Unfortunately we are getting more information from Yarrow Bay than from the city.”

Quick change

The sudden termination of Voelpel Sept. 25 and the quick hiring of Smith Oct. 1 raised questions and some confusion among council members.

When Voelpel was terminated, Botts provided a press release that was written by Combs. Because Voelpel had started looking for a new job the city needed to find a new city administrator, it said.

Although the city at the time indicated the split was amicable, an e-mail message from Voelpel received through a public records request indicates another story.

Volepel sent an e-mail to Olness at 7:07 p.m. Sept. 24 stating, “I know there is a move afoot to hire Leonard Smith of PacWest Engineering to replace me as city administrator immediately. I know he has a long relationship with VSI, so I understand the comfort level completely.

“I just want to be sure the council knows that I have no job offers in the works. As I said, I was going to start looking and I don’t retract that statement.... it often takes 1-2 years for a city manager or other local government professional to find a job.”

Later in the message she writes, “It appears the City found Leonard in a matter of a couple of weeks, since it’s only been a couple of weeks since I first said anything to the mayor....

“I of course thought the city would want time, once I gave notice, to go out and recruit and find the best possible candidate.

“In any case, I will survive this no matter what but it’s truly heartbreaking and I am in complete shock.”

A 3:40 p.m. Sept. 25 e-mail from Councilman Bill Boston to Olness regarding Voelpel stated, “Her email does not seem like a good-bye. Is she staying or not? Will she be around for 60 days? It does not sound like it was as clean and final as Loren thought it would be. I am confused.”

Olness sent an e-mail to Boston at 5:03 p.m. Sept. 25 stating, “I talked to Loren late this afternoon. I think he is calling all council members this weekend. Apparently it went well today (as can be expected). He said Gwen appeared to accept the decision..... The details should be worked out by Tuesday. Leonard will be there Monday morning.”

State auditor

The hiring of Smith triggered a series of complex and confusing problems that remain unresolved.

During the Oct. 1 executive session one council member insisted a background check be completed for Smith, although the contract hiring him was approved by the council and signed by Botts.

Once problems with Smith’s background surfaced, the relationship between Combs and Botts apparently broke down.

State Rep. Chris Hurst, D-Greenwater, who was a commander on the Black Diamond police force for 25 years, was contacted by former and current city officials.

Documents outlining the billing allegations against Combs were given to Hurst and he contacted Jim Brittain, an investigator with the state auditor’s office, Attorney General Rob McKenna and King County Prosecutor Dan Satterberg.

Mindy Chambers from the auditor’s office said, “We are at this point looking at the issues and when we reach a conclusion we will notify all parties involved.”

Sources have indicated the relationship between Combs’ legal firm VSI and Fife-based PacWest Engineering, which was owned in part by Smith, was an issue being looked into by the auditor.

The city has used PacWest for consulting at times in the past.

VSI is involved with the Badger Mountain South development in Richland, Wash. The Jan. 27, 2009, Richland City Council workshop minutes describe Combs as “a principle with and Land Use Attorney for VSI Development,” which was handling the Badger Mountain South development.

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